Positive forecasts for Bitcoin: optimism returns

After what happened yesterday in the financial markets, the forecasts for the price of Bitcoin have become a bit more positive.

The picture is still uncertain, but yesterday at one point it had become clearly negative. However, as the hours passed, everything seemed to return to normal. 

The fear of yesterday

Yesterday, the traditional stock markets recorded significant losses, particularly the American ones.

The underlying problem has been the possible burst of the AI bubble. 

Over the past two years, a speculative bubble seems to have inflated on stocks related to artificial intelligence. 

For example, the Nvidia stock, the main representative of this sector, had risen from $12 at the end of 2022 to a historic high of $153 before mid-January 2025. 

The fact is that it was believed that the spread of AI-based tools would continue to exponentially increase the company’s demand for microchips. However, yesterday a new Chinese AI, DeepSeek, announced that it had achieved excellent results with much less hardware than expected, and this suddenly and significantly reduced expectations for Nvidia’s future sales. 

The stock in a single day lost 1%, falling back below $120. This caused the Nasdaq 100 to lose 3% in a single session, but for example, the S&P500 stopped at -1.5%.

In other words, with the spread of the news of DeepSeek, the fear also spread that the AI bubble might burst, but over the course of the day, this fear seems to have diminished.

The impact on Bitcoin

Initially, the price of Bitcoin had dropped in a few hours from $105,000 to $98,000, but the decline stopped there.

It should be remembered that 98,000$ was not only the price in mid-January, but it was reached for the first time in the history of Bitcoin only two months ago. 

During that decline, yesterday the Dollar Index had risen from 107.4 to 107.7 points, but later it fell below 107.1 points. This decline helped the price of Bitcoin (BTC) to recover, effectively ending the drop. 

In the following hours, the price of Bitcoin moved well above $100,000, practically erasing much of the losses resulting from the spread of fear of the AI bubble burst. 

Although it is not yet possible to state that the burst of the AI bubble has ended, for now it seems more like the burst of a mini-bubble rather than that of a true large speculative bubble. Between today and tomorrow, there will probably be more certainties from this point of view, but the resilience of the S&P500 index rather explicitly suggests for now that there is no fear of the burst of a truly gigantic speculative bubble. 

In other words, the AI bubble seems primarily concentrated on the AI sector, and secondly, it appears more like a temporary mini-bubble rather than a large speculative bubble. 

The forecasts on Bitcoin

Yesterday, at a certain point, negative forecasts had started to circulate not only about Bitcoin, but especially about altcoins. There were even those who began to talk about a bear-market. 

The fear has now subsided, even if it cannot be ruled out that it may reappear, and the forecasts have returned to being positive. 

However, there is a piece of data that still makes it impossible to imagine a restart of the bullrun in the short term. 

In fact, not only has the Dollar Index today returned to approaching 108 points, but forecasts say it could rise further. This is effectively holding back the recovery of the price of Bitcoin. 

If yesterday before the drop BTC was at $105,000, today it barely managed to get close to $103,000. In fact, the possible further growth of the Dollar Index in the short term suggests that there could even be a new return below $100,000.

The medium-term Bitcoin price forecasts

However, this only applies to the short term, which only interests speculators, while things in the medium term seem different. 

There is one particular point that gives hope to investors in Bitcoin. 

In fact, the yield on the US 10-year government bonds (US10Y) has fallen from 4.8% in the middle of the month to the current 4.5%. Additionally, yesterday, with huge amounts of capital fleeing from AI stocks, it rose by only 0.02 percentage points. 

Note that from December 9 to January 14 it had done almost nothing but rise, moving from 4.1% to 4.8%, therefore starting from mid-month it seems to have reversed the trend. 

This suggests that for almost two weeks now there have been capitals exiting from US bonds, as they have become less attractive due to the reduction in their yield. These capitals could flow, for example, into risk-on assets, so much so that the US stock index S&P500 in the same period rose from 5,800 points to over 6,100, before yesterday’s drop to 6,000 points. 

The hypothesis that is gaining ground is that if in the short term the situation could remain difficult, even for Bitcoin, but if the Dollar Index were to fall back towards 107 points, there could be conditions for a recovery of the bullrun.